The lending market for DIVO — Amplify's CWP Enhanced Dividend Income ETF — has tightened sharply this week. Cost to borrow jumped 79% in seven days. Yet short interest is near record lows, and options traders are leaning calls.
Cost to borrow hit 1.64% on April 27. That's up from 0.84% just a week ago. For an income-focused dividend ETF, a CTB near that level is notable.
The lending pool is close to exhausted. Availability has dropped to roughly 9% — only about one share remains available for every eleven already lent out. The 52-week peak utilization was 100%, and DIVO is tracking close to that floor again at 91.6%.
This is not a slow drift. Through most of March and early April, the borrow market sat loose. Utilization was below 25% for most of April 1–14. Then it spiked. On April 21–23, it jumped from 37% to over 92% in two days. It has stayed elevated since.
Short interest stands at just 0.18% of free float. That is a trivially small number. Yet the lending pool is nearly fully drawn.
The likely explanation: ETF mechanics. Market makers and authorised participants routinely borrow ETF shares for creation/redemption arbitrage. That activity isn't "short selling" in the directional sense — but it consumes the same lending pool and drives up costs.
The 79% weekly CTB rise, combined with near-zero directional short interest, points to structural borrow demand rather than a bearish thesis on DIVO itself.
The put/call ratio tells a different story from the borrow market. PCR sat at 0.62 on April 27 — well below its 20-day mean of 0.91. The z-score is -1.09. Options positioning has rotated decisively toward calls over the past week.
As recently as mid-March, the PCR sat above 1.50. That reversal is sharp. Income ETF options are used heavily for covered call overlays and yield enhancement — DIVO itself runs a covered call strategy — so PCR moves here carry a different interpretation than for single stocks. Still, the shift from hedging to call activity is clear.
What to watch: Whether CTB continues climbing as the lending pool stays drawn. A move above 2% would be the highest rate in at least 30 days and would suggest structural borrow demand is intensifying further.
See the live data behind this article on ORTEX.
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